tv Cavuto on Business FOX News July 19, 2014 7:30am-8:01am PDT
is still the place to be. >> all right. okay. and quickly, let's find out what everybody else thinks? >> down for the rest of the year. >> gary b? >> i'm a bull. >> okay. the cost of freedom continues. "cavuto on business" is up next. of all of the problems over there, are we missing a bigger problem right here? held h hello, everyone. i'm charles mann in for neil cavuto. worse times are coming if washington does not wake up. and charlie gas pa reno and daygan mcdowell will be back next week, but gary, how big is this? >> well, they say that a crisis is coming, but i say it is here. when you have $66 billion in debt, and $65,000 for every taxpayer, this is serious bucks here, and it affects fl
flexibility. if we have another '07 or '08, where do which get the money to use? we can't fix roads and bridges and it is a big problem and it is going to be worse with the legacy costs coming down the pi pipe. >> and sandra, it feels like everybody was up in arm when the debt was $14 or $15 trillion and are we at the point where we are so sanguine about it, that we don't realize it is not just a economic problem, but a defense pr problem? >> yes, and the more interest rate payments that we have, and when you look at the social skuecurity and the medicare and ned cade costs right now, they account for 7% of the gdp, and this cbo is projecting that it is going to double for 14%. >> the point is that, charlie, and this is with the low interest rates anyway and this is an unstable nation. >> no, it doesn't. we are not in a crisis right now. listen -- >> when do we get into the crisis and give me a number? >> who knows, but it is more than $17 trillion?
>> well, let me make this point that i am against the fact that we are borrowing for the having fun so that our kids pay in the future, because that is a traf ci -- travesty, but everyone here saying that we are in a crisis, and they are wrong, because people are buying the debt for a reason. with we are not a crisis, and we are for many other reasons including a lousy president, but for you to say that we are in a crisis is absurd and it violates economic rationale. >> and adam, i want to go to you, do we wait for the crisis number, because charlie cannot give us the numb ernumber, and s not $17 trillion, where is the turning point back? >> well, i agree with charlie, and here is the good news, we are not in a crisis and we know what needs to be done, and what needs to be done and sandra touched on it, entitlement refor reform, and that is the only
thing that has to be done. >> it is so easy to get done. >> and it is -- hold on. it is a political problem, and here's the really good news, and here is a difficult time in the world, the good news is that the problems in the united states are not nearly what the rest of the world faces in their horrible problems. we can do this. we can fix social security and fix medicare, but it is going to take some political will and the good news, charles, we have time. >> and here is the bad news, we are walking past this thing, and whistling past the graveyard, adam. gary, i want to go the you, because listen, nobody is saying that we are falling off of the cliff tomorrow, but the idea to keep ignoring it and one day flip a switch and fix it is absurd. >> well, look at the ticking clock on the daily basis, my frie friend. look, i read last week that the reason why the ten-year is down the 2.5% is that china is buying the living daylights out of it. this is about national security if we keep owing all of the other countries, a wend will have to deal with them, and when we have to deal with them going
forward, we will lose a ton of leverage and flexibility and the problem is that it never ends. you keep saying about no crisis, but all i know is that nobody is doing anything about it. >> and gary, there is a reason that the world is buying the debt. we may be the tallest midget in the room, but we are the tallest midget in the room. >> i am not worrying about who is buying it, but i'm worried about the fact that we are selling it. >> charles, you are looking at it wrong. you are not to look at the overall debt, but look at the overall debt in gdp. >> it should be under control in the next year -- >> and you cannot give me an economic crisis where the dollar is g is going to implode. >> look at that. the u.s. dollar in the toilet for years. what kind of buying power do we have with the greenback right now? >> really? we can't buy anything. >> why do you think that oil is over $100 a barrel, because of the devaluing of the dollar. >> why are we paying $3.50 for gas. is that a lot of money?
>> you are nuts. >> you are nuts. >> hold on. what do you think that the assets are denominated in? the u.s. dollar which is extremely weak right now. >> you are telling me that people can cannot afford gasoline right now? >> hold on. >> charlie, i am going to bring adam back in, because adam, here is the thing, to me, the big number $17 trillion along with t the unfunded liabilities that sandra brought up earlier in the show, and cumulatively, the number is outrageous and we could not put it up on the screen with the smallest font possible, and that is a yellow if not red flag. and are you confident that we are the only game in town right now? >> well, we never should be too confident about anything, and you made that point well at the outset, because this is certa certainly a problem, and it certainly could come due and will come due, but i want to point out that we made it through a terrible financial crisis that was the second worst
crisis of the depression, and we made it fine. the u.s. economy is sound. could it be better? absolutely. should we address it? absolutely. >> and the members of the panel, including sandra have been talking about the implosion of the dollar and the economy and we will have massive inflation ever since the fed started to print money, and it is not happening. it is not happening. >> and you need the talk about the strength of the u.s. consumer power when you make money like that, charlie. >> well, it is not. >> and i want to bring in gary k, because here is the thing, that we have all been talking about it, but we are all relatively young. the sense that it has not happened yet so it won't happen is nuts. >> i am not saying that. >> gary k, the point? >> well, let me say this, that the economy is better and on the back of another $6 or $7 trillion more in debt, and the back of the fed printing $4 trillion, and they have manipulated the interest rates down to where they are right now, and what if they lose
control of the interest rates, because the debt is going to skyrocket and then doubly look out. i don't know what day it is or what numb be, buter it is, but that debt kills countries. >> the cup half full is that they manage the crisis and fufr ther more, they have signaled that they plan to reverse cou e course. this is great news. we are on the right track. now we have to address the right track. >> adam, i will tell you that the solutions are there and the people running around saying that the world is coming to an end is not right. solutions are there and it takes the political will and the american people, by the way, to vote one party in office, because the american people are -- >> he is going to bring in sandra on this. i am talking about your topic. >> well, it is something that the american people won't fess up to. >> if we can't make the sacrifices now -- >> who is we? >> you just said the american people. if it can't be done now, why would it be donet later? >> that is the problem, and i
want to say, that charlie, you think that the crisis does not come until we can't make payments on the interest. and i say that the crisis is now with the interest payments that we have, and -- >> when is that? >> linssten, if i'm $20,000 in debt, my credit score is good, and i can get another loan, but i am in a crisis now if i lose my job. we are not preparing for the emergency, charlie. >> we fought the world war ii with lots of debt and we got out of it by planning and growing the economy. that is what happens when you grow the economy. if the world was coming to an end, the lights would be off right now. >> don't look up, charlie. >> and we are borrowing so much money, and no political will, and if we make this an emergency after it is too late, then we are all in a lot of trouble. >> that is true, but don't run around saying that the world is ocoming to an end. >> i know, but our job is into form the audience, and everybody will weigh in, but the problem is one that we can all agree on.
news alert. i'm kelly wright and we want to tell you what is going on right now. new developments in the malaysian passenger jet shot down over ukraine. sources now telling fox news that the missile launcher used in blasting mh17 out of the air is probably back in russia at this hour. and this is video that reportedly shows the launcher crossing the border from the ukraine to into russia.
it is apparently missing two of the four missiles, and we are learning that the missile may have been fired from a town in eastern ukraine. no confirmation on this yet. but a u.s. official says, quote, we are building a case. and meanwhile, ukraine is accusing russia of helping the rebels to destroy evidence at the crash site. the plane went down in a region controlled by the rebels kill g i 298 people on board, and they say that militia men have recovered bodies and taken them into the city. and they say that the crash site has been compromised because the rebels have taken parts of the plane. and they are blocking areas to reach the ae yrea, and failing ensure their safety. and breaking news in israel as they are trying to put an end to the gaza attacks. israel is hitting the hamas
hard, but there is another attack that has killed another israeli victim who is the second to die in the current conflict, and the second is also being blamed for hamas says more than 300 palestinians have been killed, and israel says it is targeting underground bunkers and tunnels and destroying a good chunk of the arsenal that hamas is hiding. the military released video showing a crossed border tunnel in gaza being destroyed as they both sides are struggling to find a cease-fire. i'm kelly wright. >> if you want to be more patriotic, pay more taxes. jack lew says that more american companies need to stop fleeing overseas, to not pay taxes, because it is the patriotic thing to do. and how about lowering the taxes? >> well, instead, people, business and capital will flow to where they are treated best. that is why they left california c.a. to go to texas. i have a message for jack lew,
instead of whining and complaining what the businesses are doing, and rightfully so doing, how about setting the conditions that we can be competitive with countries like ireland with a 12.5% tax rate while we are at 35%. >> and gary, how long before you reply to the message, do you wait? >> i wonder if jack lew has an account, and if he does, i wonder if he says, try to get me a lower rate if you can. >> and this is not just a problem with jack lieu, butelew levels based on the higher city and state taxes, but the combined corporate and state income tax rate right now is more like 40%. we often here the big oil companies demonized for all of the zillions of dollars they make, but the more you make, the more you are punished. exxon mobile paid $31 billion in corporate income taxes last year. these are companies that could be arguably hiring more and
spreading out more and right here in this country, and that income is reported right here in the united states, but we do everything that we can to chase the companies out of the united states. >> and it is interesting that jack lew will admit that we have the highest corporate tax rates in the world, but still seems outraged that the businesses would actually try to escape the tax rates. >> not outrage at all. i in fact, i would say that you are not listening to jack lew, but changing the subject, charles. >> "fortune" magazine has a article out about inversion, and they are basically tax cheats, charles. here an enjoying the benefits of being in the united states, but they are trying to declare themselves foreign entities. >> adam, let me make the point. >> and charlie, i will let you in. >> and what you don't understand about this -- >> they should pay their taxes. >> adam, what i love about you is that, what is sad is the statements of you and jack lew is that you don't have any understanding of the fiduciary responsibility.
if you are a company and you have a fiduciary responsibility, and you would think that jack lew would know this because he was secretary treasurer, and you have a responsibility to the lower the cost of capital to the shareholders and it is part of the law. that is why the people are going overseas, because our tax rate is higher than anywhere else. >> and it is a argument about the structure of capitalism, and in other words, do corporations owe more to the main than they do to the shareholders? >> they need to pay taxes to account for the benefits, for the benefits that they enjoy. >> but wait a second. >> and have like a legal responsibility. >> you are misinterpreting this and politicizing it. they have a legal responsibility to seek the lowest cost of capital and you know, that it is called fiduciary responsibility, but to go overseas would be to violate the law.
>> and now, gary k i want to bring you in on this, because here's the thing, and we keep hear hearing about the fact that we drive on the roads and the corporations use them, and benefit, but you know, how is the money that the government gets from the very beginning is generated by the same companies to sandra smith's point, exxon mobile pays a whole ton of people a whole ton of money, and the money goes into the tax system, and that is how we pay the army, and pave the roads if you want to go full circle, g y gary. >> for me, the system works fine, and adam, inversions are legal. simple as that. don't call them tax cheats. there is a statute that say it is okay and well and good. the bottom line is that it about companies as charlie said a fiduciary responsibility and that i owe it to the shareholders to eget the biggest profit possible and nothing wrong with it. and it is not coming down the pike. >> well, they owe it.
>> no, they don't. >> and sandra, you made a point that at the end of the day, really f they want to fix this, lower the tax rate. >> well, this is not just about as much as i agree about charlie, it is not so much about fiduciary responsibility, but it is remaining competitive globally. japan lowered their tax rate, and that is when we became the highest tax rate in the world. we have to remain competitive and with the corpt rat tax rate where is they are today, it is harder foreus to compete. >> all right. leave it there, guys, and great points made. hey, what if i told you that the government wants to give incentives to people buying healthy foods when they are on the dole, but shouldn't they try to give them incentives for getting awe of the dole? two medium cappuccinos! let's show 'em what a breakfast with whole grain fiber can do.
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so why wouldn't i choose the fastest wifi? i would. switch to comcast business internet and get the fastest wifi included. comcast business. built for business. >> think the cost of food stamps is exploding now? just wait because the agriculture department is cooking up ways to help recipients make healthier choices. you say give them incentives for something else? >> like getting a job. we want everybody to get back to work in this country. 47 million food stamp recipients. we have got over 6% unemployment in this country and real unemployment above that, youth unemployment above that. we're going to incentivize
people to stay home? >> people who think that making poverty comfortable will get people off of poverty are nuts. you are incentivizing them to stay poor. now you have got 47 million and counting. >> and it keeps growing. there are over 80 programs now giving out almost a trillion dollars every year to people and we are giving advertisements to get on to food stamps instead of off food stamps. until somebody comes in and turns the tide it's going to grow bigger and larger and hurt the economy going forward. you have got to turn the track. >> what kills me about conservatives over here -- >> don't label me. >> whatever you are, is that you sit there and you -- >> tough crowd. >> you bemoan the crumby obama economy and then you say people shouldn't go on food stamps.
what is it? >> no, no. what people are saying is if you incentivize people for going on food stamps, if you reward someone for eating healthy. do you think any adult knows the difference between a snickers and banana? >> are people having a hard time getting a job? i have a hard time with attacking people who can't find a job. >> do you have a problem with taking taxpayer money and paying someone for making a healthy choice, for not knowing the difference between a snickers and a banana? >> of course. >> that's what we're talking about. >> remember what you're saying when you say incentivizing. what is the problem is people attacking people who need to be on food stamps. some people do need it. >> i want to get a final thought from you. it's not about bashing the recipients. i think it insults the intelligence. it's like saying you're too dumb
to know the difference between a vegetable and something that is not good for you. >> the government has been giving guidance on what healthy eating means for a very long time. >> money. i'm talking about movie tickets. paying money. money is for people who do the right thing. money. >> if we're going to pay for hungry people to have food, which is the right thing, we should do everything we can to encourage them to eat healthy foods. >> interesting that charlie knows me so well. >> my thoughts are to conservative sandra and flip-flopping charlie. >> it's time to pick safe stocks. toaster strudel! best morning ever! [ hans ] warm, flaky, gooey. toaster strudel!
fund. slow and steady. this is not a time to get fancy. >> i hear ya. all right guys, fantastic show. we really appreciate it. there is no such thing as safe but there is such a thing as great and that's us. the cost of freedom continues on a place for business, fox. >> the world getting a lot more dangerous. this week the hamas conflict flowing up just as a commercial airline is shot down and all of this is happening after the administration just claimed its helping making the world a safer place. >> i think there have been a number of situations where you have seen it intervene in a number of ways. you have seen substantially improved the, you know, the tranquility of the global community. >> have the administrations aid and trade policies ac